The need for mediation before arbitration and the requirement to refer non-stale claims for arbitration.

JUDGMENT

V. Kameswar Rao, J. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act,1996 (hereinafter referred to as `A&C Act,1996.) with the following prayers:

"It is therefore respectfully prayed that this Hon'ble Court may be pleased to pass an order:

a. Appointing an independent sole arbitrator under Section 11(6) read with Section 11(8) of the Arbitration and Conciliation Act, 1996 for the adjudication of disputes that have arisen between the parties;

b. Pass such other order(s) as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case."

2. It is a case where the petitioner had appointed the respondent to provide hostel facilities for the execution of the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) Scheme in which the petitioner was participating. The DDU-GKY is a placement-linked skill development program of the Ministry of Rural Development (MoRD). The primary aim of the program is to alleviate poverty by providing regular wage employment to youth from rural areas specifically falling inside the below poverty line (BPL) households. The petitioner also executed a Champion Employer Memorandum of Understanding with the MoRD, Government of India on September 25, 2014.

3. The MoRD defines `training and placement' as the two core program components of DDU-GKY. The petitioner as a Project Implementation Agency (PIAs) was allowed to outsource the core components (`training and placement.) for implementation of the scheme and the SkillsTech Services Private Limited ("SkillsTech") is a MoRD approved outsourced partner for the training component.

4. The petitioner and SkillsTech entered into a MoU dated December 16, 2016 and as per which the petitioner had to outsource the Training component of the DDU-GKY project to SkillsTech and perform the Placement component itself. As per, Ld. Counsel appearing on behalf of the petitioner, SkillsTech was appointed as an Outsourcing Partner for carrying out training in three states viz. (a) Maharashtra, (b) Tamil Nadu and (c) Karnataka.

5. According to DDU-GKY norms and SoPs (Standard Operating Procedures) the PIA was also authorized to engage non-core partners as well to implement the project.

6. The PIA was also responsible for periodic and annual audits, submission of utilization certificates, quality control (Q-Team), MIS and submission of documents on the ERP/Portal.

7. The State Rural Livelihood Missions (SRLMs) are the State government's rural missions, monitoring the project and utilization of funds and resources by the PIAs.

8. It was on the recommendation of the SkillsTech that the respondent herein was incorporated specifically with the objective of providing hostel operations under the DDU-GKY project to the petitioner.

9. Consequently, the petitioner and the respondent executed an agreement titled as Hostel Operations Agreement (`Agreement.) dated June 26, 2018 which was later on amended twice on August 07, 2018 and September 01, 2018.

10. It is the case of the petitioner that under the afore-said Agreement, the petitioner had agreed to pay the respondent the entire amount received from the State governments towards lodging and boarding. As per the petitioner, between 2018 to February 2020, the respondent enrolled 436 candidates in the State of Maharashtra and 280 in the State of Tamil Nadu. Cumulatively, an amount of Rs.1,96,74,403/- stands paid by way of advances to the respondent.

11. Ld. Counsel appearing on behalf of the petitioner stated that under the Agreement executed between the parties, the respondent was required to carry out its obligations as per the SoPs and the guidelines issued by the MoRD. Article 11.1 of the Agreement also obligated the respondent to maintain proper records and retain all the original paperwork connected with the work carried out under such Agreement. Particularly, he submitted that the petitioner was also required to obtain the `Financial and Oper